IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/118296.html

East Asia and the politics of global finance: a developmental challenge to the neoliberal consensus?

Author

Listed:
  • Pape, Fabian
  • Petry, Johannes

Abstract

Recent IPE scholarship locates the key dynamics of financial globalization in two areas: public money flows between the US and Asia, or private banking flows between the US and Europe. This dichotomy presents the globalization of private finance as firmly anchored within transatlantic, neoliberal financial norms. We argue that this creates a blind spot regarding the growing role of East Asian finance within the global financial system. Combining CPE insights on institutional characteristics of Asian financial systems with a macro-financial analysis of the global financial system, this paper analyzes the global implications of the geographic shift towards East Asia. First, we demonstrate the growing importance of East Asia for global macro-financial flows, actors and markets that goes beyond the rise of China. Second, we explore how the institutional arrangements that underpin Asian financial systems differ significantly from transatlantic finance. By investigating the growing importance of global investors in Asian markets and Asian investors in global markets, we explore how the shift towards East Asia introduces a growing role of developmental characteristics within global finance. This calls for a reconsideration of conventional analyses of the global financial system which often assume its role as a force of neoliberal globalization.

Suggested Citation

  • Pape, Fabian & Petry, Johannes, 2024. "East Asia and the politics of global finance: a developmental challenge to the neoliberal consensus?," LSE Research Online Documents on Economics 118296, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118296
    as

    Download full text from publisher

    File URL: https://researchonline.lse.ac.uk/id/eprint/118296/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Elizabeth Thurbon, 2020. "The Future of Financial Activism in Taiwan? The Utility of a Mindset-centred Analysis of Developmental States and Their Evolution," New Political Economy, Taylor & Francis Journals, vol. 25(3), pages 320-336, April.
    2. Fabian Pape, 2022. "Governing Global Liquidity: Federal Reserve Swap Lines and the International Dimension of US Monetary Policy," New Political Economy, Taylor & Francis Journals, vol. 27(3), pages 455-472, May.
    3. Helleiner, Eric, 2014. "The Status Quo Crisis: Global Financial Governance After the 2008 Meltdown," OUP Catalogue, Oxford University Press, number 9780199973637.
    4. Robert H. Wade, 2018. "The Developmental State: Dead or Alive?," Development and Change, International Institute of Social Studies, vol. 49(2), pages 518-546, March.
    5. Fratzscher, Marcel, 2012. "Capital flows, push versus pull factors and the global financial crisis," Journal of International Economics, Elsevier, vol. 88(2), pages 341-356.
    6. Maurice Obstfeld & Kenneth S. Rogoff, 2009. "Global imbalances and the financial crisis: products of common causes," Proceedings, Federal Reserve Bank of San Francisco, issue Oct, pages 131-172.
    7. Imogen T. Liu & Adam D. Dixon, 2021. "Legitimating State Capital: The Global Financial Professions and the Transnationalization of Chinese Sovereign Wealth," Development and Change, International Institute of Social Studies, vol. 52(5), pages 1251-1273, September.
    8. Wade, Robert H., 2018. "The developmental state: dead or alive?," LSE Research Online Documents on Economics 87356, London School of Economics and Political Science, LSE Library.
    9. Mareike Beck, 2022. "Extroverted financialization: how US finance shapes European banking," Review of International Political Economy, Taylor & Francis Journals, vol. 29(5), pages 1723-1745, September.
    10. Daniela Gabor, 2021. "The Wall Street Consensus," Development and Change, International Institute of Social Studies, vol. 52(3), pages 429-459, May.
    11. Bruno Bonizzi & Annina Kaltenbrunner, 2019. "Liability-driven investment and pension fund exposure to emerging markets: A Minskyan analysis," Environment and Planning A, , vol. 51(2), pages 420-439, March.
    12. Lena Rethel & Elizabeth Thurbon, 2020. "Introduction: Finance, Development and the State in East Asia," New Political Economy, Taylor & Francis Journals, vol. 25(3), pages 315-319, April.
    13. Prasad, Monica, 2006. "The Politics of Free Markets," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226679013, August.
    14. Baines, Joseph & Hager, Sandy Brian, 2022. "From Passive Owners to Planet Savers? Asset Managers, Carbon Majors and the Limits of Sustainable Finance," EconStor Preprints 249674, ZBW - Leibniz Information Centre for Economics.
    15. Sarah Eaton & Saori N. Katada, 2022. "A Critical Node: The Role of China in the Transnational Circulation of Developmentalist Ideas, Policies and Practices," New Political Economy, Taylor & Francis Journals, vol. 27(6), pages 907-915, November.
    16. Daniela Gabor, 2016. "The (impossible) repo trinity: the political economy of repo markets," Review of International Political Economy, Taylor & Francis Journals, vol. 23(6), pages 967-1000, November.
    17. Iain Hardie & Helen Thompson, 2021. "Taking Europe seriously: European financialization and US monetary power," Review of International Political Economy, Taylor & Francis Journals, vol. 28(4), pages 775-793, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:osf:socarx:asx7t_v1 is not listed on IDEAS
    2. Pham, Dung Thi Ngoc, 2026. "The nonlinear fintech-financial stability nexus in Asia-Pacific and the Middle East: When institutional quality and financial efficiency matter," Research in International Business and Finance, Elsevier, vol. 81(C).
    3. Daniela Gabor & Ndongo Samba Sylla, 2023. "Derisking Developmentalism: A Tale of Green Hydrogen," Development and Change, International Institute of Social Studies, vol. 54(5), pages 1169-1196, September.
    4. Fichtner, Jan & Petry, Johannes, 2024. "Global Finance: changing practices, actors, and geographies," SocArXiv asx7t, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yannis Dafermos & Daniela Gabor & Jo Michell, 2023. "FX swaps, shadow banks and the global dollar footprint," Environment and Planning A, , vol. 55(4), pages 949-968, June.
    2. Gabor, Daniela, 2023. "The (European) Derisking State," SocArXiv hpbj2, Center for Open Science.
    3. Gabor, Daniela, 2020. "The Wall Street Consensus," SocArXiv wab8m, Center for Open Science.
    4. Isaac Khambule, 2021. "Capturing South Africa's developmental state: State‐society relations and responses to state capture," Public Administration & Development, Blackwell Publishing, vol. 41(4), pages 169-179, October.
    5. Dimitar Anguelov, 2024. "State‐owned Enterprises and the Politics of Financializing Infrastructure Development in Indonesia: De‐risking at the Limit?," Development and Change, International Institute of Social Studies, vol. 55(3), pages 493-529, May.
    6. Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
    7. Algers, Jonas & Gong, Jindan & Nykvist, Björn & Åhman, Max, 2025. "Competition and climate policy in the steel transition: Comparing costs and subsidies in the US and the EU," Energy Policy, Elsevier, vol. 198(C).
    8. Ann E. Davis, 2023. "Ukraine War: Policy Miscalculations or Contradictions of Capitalism?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(4), pages 557-567, December.
    9. Daniela Gabor, 2021. "The Wall Street Consensus," Development and Change, International Institute of Social Studies, vol. 52(3), pages 429-459, May.
    10. Münch, Florian Anselm & Scheifele, Fabian, 2023. "Nurturing national champions? Local content in solar auctions and firm innovation," Energy Policy, Elsevier, vol. 179(C).
    11. Pritish Behuria, 2025. "Is the Study of Development Humiliating or Emancipatory? The Case Against Universalising ‘Development’," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 37(2), pages 344-355, April.
    12. John Weiss & Adnan Seric, 2021. "Industrial policy: Clarifying options through taxonomy and decision trees," Development Policy Review, Overseas Development Institute, vol. 39(5), pages 773-788, September.
    13. Daniela Gabor & Ndongo Samba Sylla, 2023. "Derisking Developmentalism: A Tale of Green Hydrogen," Development and Change, International Institute of Social Studies, vol. 54(5), pages 1169-1196, September.
    14. Shapiro, Daniel & Estrin, Saul & Carney, Michael & Liang, Steven, 2024. "Business groups and export performance: the role of coordination failures and institutional configurations," LSE Research Online Documents on Economics 119277, London School of Economics and Political Science, LSE Library.
    15. Petry, Johannes, 2026. "Asia, Finance and the Liberal Script: Between Accommodation, Co-Existence and Contestation," SocArXiv g8tjc_v1, Center for Open Science.
    16. Tshedza Tshivhasa Sikhwari & Masa Sylvester Motadi, 2024. "Ideologies that South Africa can borrow from selected high-growth nations in efforts to re-establish its developmental state model," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(7), pages 391-399, October.
    17. Bin-bin Yang & Sang-Do Park, 2025. "Evolving Innovation Ecosystems: Longitudinal Insights into the Triple Helix Model and Enterprise Innovation in China," SAGE Open, , vol. 15(4), pages 21582440251, November.
    18. Stöllinger, Roman, 2021. "Testing the Smile Curve: Functional Specialisation and Value Creation in GVCs," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 93-116.
    19. Jacopo Canello & Fabio Landini & Luigi Tredicine, 2025. "Beyond the giants: the hidden role of micro and small enterprises in GVC reconfiguration dynamics," Journal of International Business Policy, Palgrave Macmillan, vol. 8(3), pages 251-269, September.
    20. Mohamed Ismail Sabry, 2022. "Arab-German Trade and Institutions: The Effect of Good Governance on Arab Exports to Germany," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2400-2437, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • J1 - Labor and Demographic Economics - - Demographic Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:118296. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.